Task force to urge city to open Chargers talks | Issue of spending any
public funds is not resolved

February 19, 2003

Abstract:
Mark Fabiani, special counsel to Chargers President Dean Spanos, said: "The
Chargers provided exactly the same kind of information that every other
NFL team has provided to home cities during stadium debates. All across
the country these situations have been worked out successfully based on
exactly the kind of information the Chargers provided in San Diego."

A public amenities option would have a riverfront park with other recreational
developments built around the stadium. The Chargers would pay $200 million
and the NFL would make a contribution. The city would retain naming rights
and enter into an agreement with the county to own and operate the stadium
and issue bonds. Two-thirds of voters countywide would have to approve a
tax or user fee to pay off the debt.

Editions vary
A task force that has spent the last seven months debating the Chargers'
future in San Diego is ready to tell the City Council to open talks with
the team on building a new stadium.

Still unresolved among task force members is whether any public funds should
be committed to the project or where the stadium should be built.

However, the task force is setting up a series of strict conditions that
would put the burden of revenue shortfalls and unexpected costs on the Chargers.

Those are among the topics the Citizens' Task Force on Chargers Issues will
have to decide as the panel prepares to hold its last meetings tomorrow
and Feb. 27. Both meetings begin at 6:30 p.m. at City Hall and are open
to the public.

Task force Chairman David Watson said Chargers officials have refused to
release financial information that would help the committee determine whether
the team faces economic hardship without a new stadium.

Some task force members have said they need that information. Otherwise,
they can't justify using public money for a stadium, especially when the
state and city face budget shortfalls.

Mark Fabiani, special counsel to Chargers President Dean Spanos, said: "The
Chargers provided exactly the same kind of information that every other
NFL team has provided to home cities during stadium debates. All across
the country these situations have been worked out successfully based on
exactly the kind of information the Chargers provided in San Diego."

The National Football League gave the task force data that show the Chargers
dropping from 15th in revenue to 26th of the league's 32 teams. But they
gave no information on expenses.

Fabiani said he wants to get to the point where the city and team can negotiate
directly.

"We have enjoyed working with task force members, although there surely
have been frustrations on both sides," he said. "But we respect
the amount of time task force members have devoted."

The City Council appointed the 15-member volunteer panel in July amid talk
the Chargers would trigger a renegotiation clause in their stadium lease
with the city and possibly relocate to Los Angeles.

The council asked the task force to study ways to keep the Chargers in San
Diego in a fiscally responsible way that the public could support.

Last month, the Chargers showed the panel their plans for the 166- acre,
city-owned Qualcomm site. The team has proposed a $400 million stadium,
with the city paying half the cost.

The team says the city could cover its costs -- without dipping into general
fund revenues used to run day-to-day operations -- by selling or leasing
66 acres of the site to a developer who would create an urban village around
the stadium that would include housing, retail shops, offices and a hotel.

However, a consultant hired by the city to assist the task force says the
Chargers' figures would not cover the city's half.

The biggest stumbling block for the task force continues to be whether to
support using public funds.

While most panel members are undecided, a few have said they oppose it.

"The city of San Diego should not commit existing or future public
funds to the development of a new stadium or for the refurbishment of the
existing stadium," panel member Jeffrey Smith wrote in a statement
to the task force.

"The city should not allow proceeds from the sale of public property
nor shall it redirect existing or future property tax revenues to fund a
new or refurbished stadium," said Smith, a real estate development
executive and vice chairman of the Rancho Penasquitos Planning Board.

A draft of possible task force recommendations, written by member Geoff
Patnoe, summarized key areas where the panel, in general, agrees.

The draft urges city leaders to assemble a negotiating team to "begin
discussions with the Chargers regarding the feasibility of a new stadium
at a mutually agreeable site with mutually agreeable terms and conditions."

Once negotiations conclude, the task force should reconvene and review the
results before the City Council asks voters to approve a proposal in 2004
or 2006, according to Patnoe's draft.

Should the talks with the Chargers fail, the city should attempt to enforce
its current contract with the team, the draft says.

Key recommendations in the draft include:

No cost to the city's general fund.

Eliminate from the team's current lease the renegotiation trigger clause
and the ticket guarantee before beginning talks.

Address the $68 million bond debt from the 1997 expansion project and other
payouts from potential demolition of Qualcomm Stadium. This would include
penalties for early termination of contracts for naming rights and food
and beverage concessions.

Seek an ironclad lease with the team for at least the term of any public
debt.

Obtain an NFL commitment for multiple future Super Bowls.

Prohibit task force members from becoming part of any expert consultant
team the city creates to negotiate with the Chargers.

These principles, according to Patnoe's draft, would guide city negotiators
as they looked to one of three options with the Chargers:

A business option would have the city leasing the Qualcomm site to the Chargers,
with the team paying to develop it and a riverfront park. The team would
keep all revenue and accommodate existing users.

A public amenities option would have a riverfront park with other recreational
developments built around the stadium. The Chargers would pay $200 million
and the NFL would make a contribution. The city would retain naming rights
and enter into an agreement with the county to own and operate the stadium
and issue bonds. Two-thirds of voters countywide would have to approve a
tax or user fee to pay off the debt.

A third option would follow the Chargers' proposal if the 166- acre Qualcomm
site qualifies as a redevelopment area.